Australian businesses fight insurance industry for payouts over coronavirus revenue losses
- Australians are battling insurers to claim pay-outs they say they are entitled to as a result of lost revenue due to COVID-19
- Some insurers are relying on fine print in policies that reference legislation that no longer exists
- The insurance industry has defended itself, saying that paying out such claims would cost $10 billion
His only small comfort during the worst of the downturn was the belief his insurance policy covered him for this exact kind of revenue shock.
His insurer believed otherwise.
“I’m not going anywhere. I will fight,” he said.
Mr Haupt is among at least 250,000 Australian businesses affected by a drawn-out legal battle over the fine print in insurance policies that looks set to stretch well into next year.
“If the insurance industry just tries to hide behind their terms and conditions, I think that’s diabolical,” said Mr Haupt.
Australia’s financial regulator has now intervened with its strongest statement yet on the dispute, telling the insurance industry to throw its customers a lifeline and start paying out valid claims.
“Claims on these policies should be assessed and, where appropriate, paid in a timely manner to ensure that financial pressures on small businesses are not exacerbated by slow payments,” the Australian Securities and Investments Commission [ASIC] said in a statement to ABC Investigations.
“If there are reasonable grounds to pay part of a claim but not to pay the full claim, we encourage insurers to make an interim payment.”
Does COVID-19 count as ‘business interruption’?
At the heart of the dispute is a type of cover known as business interruption insurance, which is designed to bail out companies that have suffered a major disruption to trade — such as a fire or natural disaster.
The industry insists the policies are not designed to cover pandemics, so paying out claims like Mr Haupt’s would send a financial shockwave through the sector.
“Pandemics are something that have never been contemplated for cover simply because they’re too large an event,” said Andrew Hall, chief executive officer of Insurance Council of Australia.
“If you can get a price or a premium to cover a pandemic, it is likely to be very expensive.”…
This article is from the ABC News, you can read the full article here: